Very young and very interested in real estate!

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Very young and very interested in real estate!

Benjamin Z.
Lincoln, NE · Member since 2013 · 8 posts · 0 votes

I'm typing this off of my smartphone so I apologize now for any spelling and grammatical errors. I got hired to work for a friend of mine for a week out in the middle of nowhere and forgot my laptop.

Anyway,

I would like to start by saying that I am 18 years old and will be starting school.at a local community college in about a month (I wanted to save some cash and not get thousands of dollars into debt immediately). My parents want me to go to a four-year university after this year. However, I do not. My parents want me to get a degree and would like me to be a journalist, a career I no longer have interest in.

Personally, I want to begin my career in real estate ASAP. A degree in my opinion is just a $100,000 piece of paper that really won't help me as much as actual experience would.

This brings me to my first question: is college worth it?

My parents certainly believe it is but a few people I've spoken to have given me a very different opinion.

Moving on,

My dream is to become a landlord and own several properties as well as possibly buy out or invest in several different companies in the future. To start, I've been wanting to buy a cheap $20, 000 home and rent it for $1000 a month or so. Paying for the mortgage with the rent and saving the rest of it up for a second investment.

I've begun to debate how good of a plan that is after reading around a bit here on BP and would like to hear some advice from many of the succesful people on here.

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Mike Nelson
Wholesaler · Washington, D.C · Member since 2011 · 449 posts · 94 votes
13y

I think you already know the answer to your question, @Benjamin Z. . As much as people, esp your parents will give you advises, sensible ones, in the end...you're the only one who knows what's best for you.

If you think that's really your dream, then honestly I don't think you need college to get it. But you'll need to still learn a lot and work really hard.

We are very blessed to have been existing in this particular period in human history, The Information Age. Knowledge has never been this easy to access. Today, you just go to Google and type practically anything and you'll get your answers. What I'm saying is, most of the things we used to pay for can now be accessed faster, for free.

This recent post http://www.biggerpockets.com/forums/517/topics/98680-great-guest-post-on-justaskbenwhy-blog-by-doug-dowell has a link to an article that talks about coursera.org. Check it out.

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  • Mark Whittlesey
    Real Estate Investor · Encinitas, CA · Member since 2013 · 225 posts · 91 votes
    13y

    "This brings me to my first question: is college worth it?"

    The simple answer is: maybe. If you want a STEM or professional career... then clearly it IS worth it. But those will be mostly "jobs".

    If you want to be an entrepreneur... then be one. In this case, not worth it.

    1Reply
  • Benjamin Z.
    OP
    Lincoln, NE · Member since 2013 · 8 posts · 0 votes
    13y

    Thanks for that fast reply Mark! That seems to be the unanimous answer amongst all the business-minded folks I've spoken to.

    0Reply
  • Mike Nelson
    Wholesaler · Washington, D.C · Member since 2011 · 449 posts · 94 votes
    13y

    I think you already know the answer to your question, @Benjamin Z. . As much as people, esp your parents will give you advises, sensible ones, in the end...you're the only one who knows what's best for you.

    If you think that's really your dream, then honestly I don't think you need college to get it. But you'll need to still learn a lot and work really hard.

    We are very blessed to have been existing in this particular period in human history, The Information Age. Knowledge has never been this easy to access. Today, you just go to Google and type practically anything and you'll get your answers. What I'm saying is, most of the things we used to pay for can now be accessed faster, for free.

    This recent post http://www.biggerpockets.com/forums/517/topics/98680-great-guest-post-on-justaskbenwhy-blog-by-doug-dowell has a link to an article that talks about coursera.org. Check it out.

    2Reply
  • Abbott Mary
    knoxville, TN · Member since 2013 · 36 posts · 2 votes
    13y

    @mike nelson It is really beautiful how quickly and easily you can do anything these days isn't it? Even though i'm young it still amazes me. It's like your parents said "you can be anything you want"

    For the OP, I would say that you are definitely better off taking community college classes. I would focus on a business degree, taking any and all investing, real estate, or entrepreneurship classes they offer. Practice frugality. Save money and join your local REIA and practice putting yourself in uncomfortable social situations where you are FORCED to learn and grow. NETWORK FROM DAY ONE. Ask people about themselves and don't just talk about you. In terms of immediate acquisitions, I would get a 2,3,4plex and rent to other students to see how you enjoy land lording. Good luck!!

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  • David C.
    Real Estate Professional · Mechanicsburg, PA · Member since 2012 · 319 posts · 167 votes
    13y

    Knowledge Is Power.

    A Degree Is A 'credential', Its A Shortcut For Telling Other People That You Meet At Least Some 'standard'

    I Admit I Take J. Scott More Seriously Knowing That He Has Both. I Have No Idea Why Each Word Stats With Caps. Sorry, ThIs Is Awful. Clearly I Fail Basics Of Swype.

    Based On Your Goals, Knowledge Is Probably All You Need, But Id Your Goals Change, A Credential May Be Necessary.

    0Reply
  • Mike Nelson
    Wholesaler · Washington, D.C · Member since 2011 · 449 posts · 94 votes
    13y

    I hear you, @Abbott Mary .

    0Reply
  • Dane Fenner
    Homeowner · Rosedale, NY · Member since 2013 · 37 posts · 4 votes
    13y

    Is college worth it?

    In my opinion it depends on who you are, what you want to do with it and if can you afford it.

    I believe college shouldn't be used only to obtain a degree. Many people don't realize how useful of a networking tool it is. I've met many young future entrepreneurs, future investors, and future employees in college.

    In your situation i would recommend majoring in Accounting, Project management or business management even if you just get a Associates degree. This will give you some book knowledge to help you run your business and degree to fall back on.

    But most importantly I would NETWORK NETWORK and NETWORK.

    So you answer your question is college worth it, based off your goals i think it is.

    Hope this helps

    1Reply
  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    13y

    @Benjamin Z Answer this, How would having a degree hinder your life?

    A degree will never be a detriment to your life. Unfortunately, like it or not, many times having a degree influences people that you do business with and has value in that way.

    Going to school doesn't mean that you can't be a real estate investor. Take online classes. Take classes that will benefit you. Accounting, Real Estate Principals, Finance, Psychology, Marketing, etc.

    0Reply
  • Benjamin Z.
    OP
    Lincoln, NE · Member since 2013 · 8 posts · 0 votes
    13y
    Originally posted by Karen Margrave:
    @Benjamin Z Answer this, How would having a degree hinder your life?



    To answer your question: I believe a degree itself wouldn't do any harm to me, however, the time and money needed to obtain one is what would hinder me.
    I also agree that a degree would give me a slight advantage in some situations and its not necessarilly an awful idea.

    On a different note, does anyone have any advice as to where I could begin networking?

    Edit: Sorry this reply came out looking a little awkward, its very difficult to use this website on my mobile device

    0Reply
  • Shaun Reilly
    Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
    13y

    Should you go to College? Maybe, it all depends.

    Based on what you are saying it sounds like it might not be the best fit. If you aren't excited by the prospect and you no longer have a desire for the career you were going to study for it might not be the best choice.

    Going to Community college for a while isn't a bad idea. You can take courses that will have some practical value in your investing career and you won't be raking up tons of debt.

    If you find you really like it and think there is a career you want to pursue that requires a degree then you can take the leap to a 4 year school. If not you gained some useful knowledge and for a minimal cost.

    As far as your parents are concerned I'm sure they just want the best for you. They probably sincerely believe that there is no better choice for you. They might be right and they might be wrong. But unless they are offering to give you a free ride they also might be pushing you in a direction that could saddle you with a crushing amount of debt that the degree may never pay for.

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  • Shaun Reilly
    Landlord and Rehabber · Newton, MA · Member since 2010 · 2k+ posts · 877 votes
    13y

    BTW @Benjamin Z.

    if you can find houses where you can be all in at $20K and rent them for $1,000 a month you will get a lot of money really fast.

    In general people will think you have a pretty great cash flow deal if you halved that rent for that price (or double the price for that rent).

    Also unless you are looking to line up private money don't expect to get a loan on a $20K house no matter how amazing the cash flow is. Banks don't like dealing with things that small.

    Now I would expect you to be able to easily find a private investor to fund you at the numbers you said. That cash flow could support Hard Money rates on a long term loan.

    0Reply
  • Owen DashnerPro Member
    Lender · Omaha, NE · Member since 2008 · 1k+ posts · 1k+ votes
    13y

    As others have mentioned, college is not just about the degree and student loans. College is a life experience that you will likely never regret. You will meet people and form relationships that you will have for the rest of your life.

    My advice would be not to be in such a rush to grow up. Believe me, when the responsibilities and liabilities you have start piling up later in life, you will at some point look back on your college days as one of the best times of your life.

    Or maybe that's just me... ;)

    1Reply
  • Benjamin Z.
    OP
    Lincoln, NE · Member since 2013 · 8 posts · 0 votes
    13y

    I'm really amazed at all the great replies I've gotten so quickly. Thanks to all of you!

    I'm definitely considering college more now especially now that I've heard some logical arguements for it aside from "Its what everyone is supposed to do"

    A few more problems I have is that I've generally struggled in a classroom type environment. I have always excelled when put into positions where I learn through experience by working with anf learning from someone in the same field as me.

    0Reply
  • Benjamin Z.
    OP
    Lincoln, NE · Member since 2013 · 8 posts · 0 votes
    13y

    The 1k rent was theoretical. The house is around 20k and is a recent forclosure in a low income neighborhood. The house would need some work on (I assume) but it is a 2ba 3br. Not sure on sq. feet off the top of my head but its certainly not to small.

    0Reply
  • Lewis Tabor
    Baton Rouge, LA · Member since 2013 · 12 posts · 1 vote
    13y

    I think I might be able to offer some input. The American Dream... we're marketed this every day. Go to school, get a job, work for the rest of your life. What you have to understand is that in our parents time the most successful people went to college and got a job that paid them more than most people. However, nowadays the value of an education has gone down. Everyone is going to college, people are driving themselves into massive amounts of debt to go to college and then work for the rest of their life in an endless cycle of paying off said debt and getting into more debt. This is not the American dream, this is being a sheep. You need to ask yourself, are you a sheep or are you a wolf? Are you content living inside the fence, or do you want to roam? Majority of the people that make real money don't do it by being safe and going to college. They do it by taking risks, opening a business, coming up with brilliant ideas, etc. Also, ask yourself this, do you want to work for someone else, or do you want to work for you? My dream, though slightly evil in its intentions, is to not have an education and to employ those that do. I don't need to spend money on a piece of paper to make money, but be damn sure I will take advantage of those that did.

    So, there you have it. My view on the American Dream. Also, you might want to pick up "Rich Dad Poor Dad" by Robert Kiyosaki. It's very helpful.

    1Reply
  • Shuai Zeng
    Investor · Los Angeles, CA · Member since 2012 · 108 posts · 23 votes
    13y

    Quick Reply.

    College = Famous 8 - 5 Daily Grind.

    Why waste so much money trying to be smart, when you can save the money to make more money if you know how. I'm not saying not to go to college, maybe a night/ part time college after you have enough spare money??

    PS:

    Also there is no way 20k house make 1k, even theoretical, maybe $600- 700?? If you see a house that cheap, u know there will be other that bid on it. 2010 is over, it is 2013 where prices go up, and inventory is king.

    0Reply
  • Naomi Marie
    Involved In Real Estate · Odenton, MD · Member since 2013 · 10 posts · 2 votes
    13y

    @Benjamin

    This is the VERY first forum that I've read on the site and I couldn't relate more! I went to community for a year, with every intention of transferring and eventually going to law school and getting into corporate law. Eventually, I got tired f being broke and decided that joining the Navy (who would pay for school as well) was the solution. Fast forward, 5 years and I am 24 and determined that my future is in real estate. I recently decided that I was going to begin as an agent (while still on active duty); I made the difficult decision to stop the college coursework to build my foundation. For me, at this point in my life, it is more important that I work, learn and grow in real estate then spend my time earning a degree that I won't be putting to use anyway.

    With all that being said, if I could back in time, I would not have re-enlisted. Instead I would have gone to school full time ( on the Navy's dime) and pursued my license as an real estate agent. (I realize that you are interested in investing but hopefully you will still see the point I'm trying to make). As many people have stated earlier in the forum, a degree is a credential and one that still holds some weight. I would recommend that you continue your studies and pursue real investing one step at a time. If you get to a point where you feel like your college work is impeding the progress you could be making in RE investing, then you will have to re-assess your goals; At that point, you will most likely have a better understanding of your goals and what you are capable of, therefore increasing the likelihood of success, whatever decision you make. Best of luck!

    2Reply
  • Stephen D.
    North Augusta, SC · Member since 2013 · 10 posts · 2 votes
    13y

    I think college these days is overrated, unless of course you are going into a STEM field.

    Maybe consider getting a job in the trades? If you were to learn carpentry, you might be able to cut down on contractor costs in the future.

    I worked with a lot of carpenters that flipped houses for a living until the market crashed. The majority of them never went to college.

    Just my 2 cents.

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  • Stephen Masek
    Investor · Mission Viejo, CA · Member since 2012 · 627 posts · 204 votes
    13y

    What might you get out of college that you can't get on your own, or can't get as efficiently? Going massively into debt for college is a horrible idea, and it is sad to see so many starting out that way.

    1Reply
  • Bryan H.
    Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
    13y
    Originally posted by Benjamin Z.:

    To start, I've been wanting to buy a cheap $20, 000 home and rent it for $1000 a month or so.

    I think everyone would like to be able to do this.

    0Reply
  • Nathan Ewert
    Provo, UT · Member since 2013 · 28 posts · 2 votes
    13y

    college is for those who want "jobs" unless your getting your BMA of some sort of business degree. Getting a good job does help with cash flow when your getting started. I read robert kiyosaki (best mind set changing book/ motivation book iv read about being an entrepreneur!) I figure follow Kiyosakis advice on businesses and Dave Ramsey with personal life. Anyways, its up to you but im starting out as a licences real estate agent since i know im good with networking and lead finding. I think if you dont really know what you want in college it will be a joke! I was going to go into the Oilfield as an engineer but real esate has such a huge potential i couldnt turn it down!

    0Reply
  • David C.
    Real Estate Professional · Mechanicsburg, PA · Member since 2012 · 319 posts · 167 votes
    13y

    Just like any real-estate deal, college must be analyzed for each person. School was easy for me, I went to college on a free-ride, it was the path to a cushy professional job, which I quit to become a consultant, which I quit to become an independent consultant. It has made me 'rich' by most standards and I have a very easy life. For me school left me with no debt, had no cost but time and was what I was best suited for.

    If school does not agree with you, and you have passion for Real Estate, go for it. If you have the energy to get an associate in 'business' or something at a community college at low cost, chances are you'll pick up some knowledge and a credential to fall back on. I don't see much benefit in closing the door on school when you are young. Do both, sleep less.

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  • Benjamin Z.
    OP
    Lincoln, NE · Member since 2013 · 8 posts · 0 votes
    13y

    Thanks again to everyone for the advice. After talking more one-on-one with more people I've found that the idea of buying a 20k home and renting it for 1k is definitely unrealistic.

    My new plan is to purchase a 4plex rent out 3 of the units live in one and go to school for a year and see how that goes for me. That'll let me A. See if I enjoy being a landlord and B. See if schools a good choice

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  • Ben Leybovich
    Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
    13y

    @Benjamin Z.

    Welcome to BP. You are wise beyond your years to consider things as you do. I've written on the subject of "college EDU" extensively including on the BP blog. Take a look and I hope this helps:

    http://www.biggerpockets.com/renewsblog/2013/03/26/should-i-bother-with-college/

    0Reply
  • Account Closed
    Real Estate Investor · Raleigh, NC · Member since 2013 · 27 posts · 1 vote
    13y

    @Benjamin Z.

    I'll try to shed some light on the subject. My background: went to a top public college, got my degree last year and am now enrolled in a Master's program (an MBA program of sorts). I bought my condo when I was 21.

    I definitely lucked out cause the parents paid for college. I still came home on weekends and worked though. Had they not, I think I still would have gone but I might have put it off for a year to save up. Might have wracked up some debt but would have paid those suckers off ASAP.

    When I realized I wanted to go to graduate school at a different college (one that my brother also attends), I started browsing places to buy near school. Mostly cause I was sick of paying rent and knowing it all just went toward paying off someone else's mortgage. I bought a place that was built for student living -- 4 bedroom/4 bath condo with shared living area/kitchen. I live in one room, and rent out of the rest which more than covers mortgage and expenses (as long as all goes according to plan AKA the appliances keep working).

    It has worked out well so far. It's allowed me to have very low living costs since housing is covered (well, other than the 20% down payment I put down). I ended up taking a year off between undergrad and grad school so that really helped, as I was working a few menial jobs (barista, cashier etc.) while I figured out what I wanted to do. So the cash flow from jobs wasn't fantastic but I made do.

    You potentially have the start of something great. Don't throw college out completely. I've never been one of those book-smart people but I worked hard, made some awesome lifelong friends and learned a lot about living on my own and making my own decisions. I wouldn't take it back, nor would I take back buying the condo (even if it was a rather spur of the moment decision, we don't need to get into that though). In the end, this will either be as good or as bad as you make it. IT IS NOT EASY. You don't sign your name a few times and just start seeing checks rolling in. It takes a LOT of hard work, dedication, blood, sweat, and tears. IF you are prepared for this, then jump. If this sounds daunting to you, perhaps revisit your plans. You can make your dream a reality but it takes a lot of effort and energy on your part, and you probably will see a whole lot of money go out before you start seeing anything come in. Be prepared.

    2 years later though, I'm 23, a landlord, have made some profit and am thinking about the next deal (when I'm done with Master's, of course) :-)

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